Petronet LNG Ltd. share price forecast

Prince Pipes: We maintain our BUY rating on Prince Pipes, with a revised lower target price of INR 645/sh (18.5x its Sep-24E EBITDA). We continue to like Prince for its large product portfolio, robust pan-India distribution, and low exposure (~30-35%) to price-sensitive agri/rural markets. Prince Pipes reported weak performance in Q2FY23 as it delivered both a YoY volume decline (-10%) and an EBITDA loss of INR 113mn (OPM: -1.8%). The performance is adversely impacted due to continued dealer destocking and sharp inventory lossesINR 0.8-0.9bn or INR 22/kg in Q2FY23! Teamlease Services: Teamlease reported lower-than-expected revenue growth of 4% QoQ and margin expansion of 27bps (on a lower base) lagged estimates. The general staffing volume growth of 2.3% QoQ was the lowest in the last four quarters and compliance-related issues impacted the NETAP trainee's growth. The hiring activity remained stable in key verticals like BFSI, consumer and e-commerce while a slowdown was witnessed in emerging verticals like Fintech and Ed-tech. The specialised staffing was impacted due to one client-specific issue in Telecom vertical while IT staffing was stable. Core staffing and HR services will continue to witness growth while NETAP/specialised staffing will take 1-2 quarters to recover. We expect gradual improvement in core staffing margin supported by better markup, higher associate/core ratio and cost savings. HR services/specialised staffing margin target is ~8-9%. We cut our revenue estimate by ~3-4% and cut EPS estimate by ~11/7% for FY23/24E due to revenue and margin miss. We maintain BUY with TP of INR 3,450 based on 32x FY24E EPS (vs...

Petronet LNG (PLNG) has reported 14% YoY decline in EBITDA to Rs11.7bn (up 10% QoQ) and 10% YoY dip in net adjusted earnings to Rs7.4bn in Q2FY23, above our estimates of Rs9.4bn EBITDA and Rs5.8bn PAT.

Petronet LNG (PLNG) has reported a 1% YoY improvement in EBITDA to Rs 10.6bn
(down 9% QoQ) and 10% YoY rise in net adjusted earnings to Rs 7bn, below our
estimates of Rs 13bn EBITDA and Rs 8.3bn PAT.

Kalpataru Power Transmission: Kalpataru Power (KPTL) reported revenue/EBITDA/APAT of INR 15.4/1.3/0.8bn, (missing)/beating our estimates by (4.7)/(11.7)/1.7%. RPAT came in at INR 1.1bn, aided by dividend income of INR 460mn from LMG and lower tax expenses. Normalising the gains, PAT has come in line. EBITDA margin shrunk both sequentially and annually to 8.4% on account of higher commodity prices and freight costs. KPTL secured new orders worth INR 42.5bn in FYTD23, taking the order book (OB) to INR 175.7bn (~2.5x FY22 revenue, includes INR 42bn L1). The standalone/net debt increased to INR 13.5/9.3bn, as of Jun'22 vs. INR 11.9/4.1bn, as of Mar'22. The pending cash flow to be realised from the Indore real estate project, for which OC was received in Jul'22, is INR 2.9bn, with INR 1bn+ expected in balance part of FY23. This shall help deleverage the balance sheet further. We maintain BUY with an SOTP valuation of INR 471. JMC Projects: JMC Projects (JMC) reported revenue/EBITDA/APAT of INR 16.2/1.4/0.5bn, beat at all levels (18/17/42% beat). The EBITDA margin was muted at 8.4%, affected by commodity prices and supply chain issues. The revenue for the road BOOT assets increased to INR 5.7mn per day (+18% QoQ), owing to increase in traffic. However, the loss funding requirement for the portfolio is INR 700-800mn for FY23 (incl. INR 350-400mn of major maintenance requirement). Wainganga Expressway restructuring is expected by H1FY23 with consent from majority of lenders received. Vindhyachal asset refinancing is expected to be completed by FY23-end. The order inflow (OI) was at INR 33bn, taking the...

RBL Bank: Despite a healthy NIM (~5%) and a positive loan growth (+2.4% YoY), RBL Bank (RBK) missed our estimates, with PAT at INR1.9bn, due to higher credit cost (2.7%). Slippages remained elevated at 4.8% (annualised), predominantly from the MFI and cards businesses. Deposit growth (in line with guidance) was reassuring - the management has guided for a pick-up in loan growth, led by retail. Given its single-engine concentration risk on the credit card portfolio (22% of loans and 56% of fee income), we believe that retail diversification is a necessary strategy. However, we argue that the expected scale and time-to-maturity are likely to take longer and call for elevated investments that back-end the 1% RoA narrative further into FY24. We also flag uncertainty around management succession and transition as a major overhang, with implications for these portfolio strategy decisions. We hack our FY23E and FY24E earnings forecasts by 9%/11% respectively and maintain REDUCE with a revised TP of INR113, implying 0.5x Mar-24 ABVPS (earlier TP at INR160). Orient Cement: In Q4, Orient's consolidated volume/revenue/EBITDA/APAT fell 12/3/24/27% YoY, dragged by weak demand and rising energy costs. High share of AFR and domestic coal usage cushioned margin contraction to healthy level of INR 946/MT (-14/-2% YoY/QoQ). Healthy cash flow has cooled off its net debt/EBITDA to 0.4x, boosting its capability to take up next round of expansions. The recent fall in the stock price also makes the valuation attractive. Thus, we upgrade our rating on Orient to BUY from ADD earlier, with an unchanged TP of INR...

Strong demand for natural gas, limited competition, capacity expansion, better operational efficiencies and efficient commercial management should drive company performance in future. We thereby reiterate our...

The 17.5 mmtpa Dahej terminal has been booked for 15.75 mmtpa under long term, thus providing visibility to long term volumes. Increase in Kochi terminal utilisation can support volume pick-up Alternate Stock Idea: Besides Petronet, in our oil & gas coverage we also like Gail. Gail is India's leading gas transmission company, which is a beneficiary of increasing gas consumption. Stable volume growth along with higher...

We increase our FY22E estimates by 12% to factor in-take or pay charges booked in Q3 along with higher spot margins. FY23/24E estimates are increased by ~2% as we make minor changes in volume assumptions. PLNG reported better than expected results with EBIDTA/PAT of Rs17.3bn (+34%Q/Q; PLe Rs10.1bn) and Rs11.4bn (+39%Q/Q, PLe Rs6.2bn), as the...

CreditAccess Grameen: CreditAccess Grameen's (CREDAG) Q2FY22 earnings beat our estimates, led by healthy NII traction and asset quality improvement. As expected, the portfolio's transient stress from Q1FY22 decreased significantly with PAR-0 falling sharply from 30.6% to 11.5% sequentially (9.9% in Oct-21 for the standalone entity). GNPA increased marginally from 7.6% to 7.7% for the consolidated entity, despite MMFL aligning to 60dpd NPA recognition, in line with the standalone entity. With collection efficiencies on the rise (99% including arrears) and a low number of borrowers (4.4% of AUM) with zero payments, management has guided for a credit cost of ~4.8% and RoA of ~2% in FY22. We reduce our FY22/FY23 earnings estimates by 18%/4% to account for higher credit costs and maintain BUY with a revised target price of INR845 (2.7x Sep'23 ABVPS). We believe that our implied multiple reflects CREDAG's high cross-cycle potential RoE and a relatively conservative approach to an inherently risky business. HG Infra: HG Infra (HG) reported revenue/EBITDA/APAT of INR 7.5/1.2/0.7bn, a miss of 6.6/5.1/5.5%. NWC days are stable at 76 (71 in Mar-21), aided by timely government payment. HG is in advanced talks with potential investors about the monetisation of three HAM projects (COD by Q4FY22). If talks fructify, it may recycle INR 2.8bn of its equity investments at an implied valuation of 1x P/BV. The latest order book (OB) stands at INR 90bn (~3.6x FY21 revenue, INR 46bn under execution). Given robust order inflows and strong execution, we increase our EPS estimate. We maintain BUY with an increased SOTP-based TP of...

Gradual ramp up in new capex to remove overhang: Management reiterated that it will go for gradual ramp up of LNG stations and Compressed Biogas Plants depending on demand and project IRRs. This removes an...

Petronet LNG (PLNG) reported a beat on our estimates, led by higher-thanestimated throughput (Dahej back at >100% at 102%, after being subdued for the last three quarters, with Kochi utilization robust at ~24%). The company expects spot LNG prices to cool off post the winter season. Currently, huge demand is seen from China and Japan, with supply constraints resulting in a spike in spot LNG prices. Despite the immediate challenges, the management remains confident about achieving >900tbtu in volumes for FY22 (~96% utilization, i.e., flat YoY supported by tied up contracts). Our numbers are in line with the...

LNG demand is expected to grow further in fertilizer, refining and transport sectors. Petronet's overall performance is recovering to preCOVID levels. We remain positive on the stock with strong momentum in demand/volumes and healthy pipeline. Hence, we reiterate our BUY rating with a revised TP of Rs. 272 based on 12.0x FY23E adj. EPS. Strong performance supported by demand recovery Consolidated revenues for Q1FY22 grew 13.5% QoQ (+76.1% YoY) to Rs. 8,598cr with volumes maintained at 209 TBTU levels (vs. 190 TBTU in Q1FY21, 218 TBTU in Q4FY21) on opening up of economy, revival of gas demand, and ease of COVID-19...

Petronet LNG is India's leading play in import of LNG in the country and will be a beneficiary of the government's aim to increase the share of natural gas in the energy basket to 15% over the long term The 17.5 mmtpa Dahej terminal has been booked for 15.75 mmtpa under long term, thus providing visibility to long term volumes. Increase in Kochi terminal volumes on commissioning of Kochi-Mangalore pipeline...

Sobha: Sobha's (SDL) Q1FY22 was subdued with presales volume at 0.9msf (38%/-33% YoY/QoQ). Presales value declined by 36.3% QoQ to INR 6.8bn. Real estate collections slipped to INR 5.5bn (vs INR 7.2bn in Q4FY21). The launch pipeline is robust at 12.6msf with 56% of launches planned for Bengaluru. To tame the commodity inflation and protect margins, SDL reversed discounts and took selective 2-3% price hikes in a few projects. Net debt reduced marginally by 1% QoQ to INR 28.2bn and is expected to reduce further, led by sales momentum, forthcoming launches, and a stable pricing environment. We roll forward our valuation to Sep-23; with a large part of launches coming in from the existing land bank, we increase our land valuation. We maintain BUY on SDL with an increased TP of INR 690/sh (INR 580/sh earlier). We retain our financial estimates, given largely an in-line performance. Petronet LNG: Our BUY recommendation on Petronet LNG (PLNG) with a TP of INR 270 is premised on robust volume offtake in FY22E and FY23E, supported by: (1) the bounce-back in gas demand with the opening of the economy, which will ensure high LNG imports, in turn allowing full utilisation at Dahej on its expanded capacity; and (2) Kochi terminal seeing higher utilisation as commissioning of Kochi-Mangalore pipeline has completed. Q1 EBITDA was 1% above our estimate and PAT was 6% above, owing to lower-than-expected gas cost; depreciation and finance cost; and higher-than-expected other income. NHPC: NHPCs revenue declined by 14% YoY to INR21.7bn in Q1FY22, given 11% YoY fall...